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Questions tagged [accounting]

for questions that relate to the laws, practices, and products of accounting. Please note that questions about accounting that are academic or have no bearing on personal finance are off-topic here.

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17
votes
3answers
12k views

In double entry accounting, how does income become equity?

Using GNUCash, help, putting it all together, I'm accounting for a lottery income transaction. I was able to get the example shown with 2 transactions. 1. Dr. Savings 750,000 Cr. Income:...
29
votes
3answers
6k views

What are the advantages of doing accounting on your personal finances?

What are the advantages of keeping track of your personal finances? Is it only worthwhile if I earn "enough"? Why should I bother?
6
votes
2answers
1k views

How to find out if a company is legit?

I'm from Sweden and considering opening a "Internet" company on Cyprus with a (valid EU VAT number), because of better tax benefits compared to Sweden and the UK (where I have other companies). I've ...
4
votes
1answer
160 views

What tax year does my income get assigned to if my client sends the payment in December but I receive it in January?

Suppose I did some contracting in December, my client puts a check in the mail in December, and I receive it and cash it in January. Does my income count for December or January?
17
votes
6answers
3k views

Indie Software Developers - How do I handle taxes?

I apologize if this is the wrong site to post on, perhaps someone could point me to the proper place if it is not. Hello, I am 17 years old and currently develop applications/games for Android and ...
9
votes
2answers
6k views

What are the costs to establish an LLC and to maintain it?

What's the average (approximately) cost to open a basic LLC in Florida state or in NY state? (FYI in my case is to buy an house in Miami and rent it. I already have a bank account in the U.S.) What's ...
4
votes
3answers
5k views

How to resolve imbalances and orphan transactions in Gnucash?

I am a new Gcash user. I Installed Gcash and imported couple statements from my bank. It is all good except that I now have huge imbalances. And I do not know how to handle this. I looked around the ...
16
votes
2answers
11k views

Starting with GnuCash. How to eliminate automatic entries ending up in the “unbalanced” account?

I just started using GnuCash and there is something I do not quite get how to get rid of (and whether I should try to get rid of). When I start importing transactions, I have expenses, income, etc. ...
10
votes
2answers
79k views

How to account for Capital Gains (Losses) in double-entry accounting?

After taking an introductory financial accounting class, I decided to use GnuCash to keep track of my personal finances. I have 5 major accounts in my general ledger: Equity Currently only used to ...
7
votes
1answer
452 views

How to double-entry bookkeep money incoming from sold items?

I started doing double-entry bookkeeping with GnuCash to keep track of my personal finances, down to the penny. I have as assets my bank account and "cash in wallet", and many expense accounts for ...
9
votes
1answer
1k views

Presenting negative numbers using parentheses: where does this practice come from? [closed]

The standard accounting way is always to show negative numbers in parentheses. Where does this practice come from? For example, this cash flow statement use parentheses indicate negative values:
6
votes
5answers
2k views

How to divide up utilities when one tenant's rent includes utilities, but others' don't?

This is an extension of my question asked here. Four roommates are living together. Two are co-tenants, who hold the lease, and the other two sublet from the co-tenants and pay rent and utilities to ...
6
votes
1answer
7k views

How to “pay” one self in a single member LLC w/ separate checking account?

I own a side company creating web apps. I formed an LLC, registered an EIN and opened a business checking account. Recently, I sold a copy of my software for let's say $10,000. Now, since everything ...
3
votes
3answers
681 views

Accounting equation: does income really decrease equity?

I am new to using double-entry bookkeeping for personal finances. GnuCash uses a variant of the accounting equation that has five variables, and which seems to be known colloquially as an "expanded" ...
1
vote
2answers
2k views

What is the meaning of realization in finance?

The definition of "realization" is well defined by multiple sources in accounting terms while we google it. But, can someone explain in terms of real life example that suits the meaning of ...
9
votes
2answers
7k views

Why is a coin an asset whereas a note is a liability on the Federal Reserve's balance sheet? [closed]

Can someone explain me why coins are assets and notes are liabilities for the U.S. Federal Reserve? I know coins are made from "precious" metals, but even notes are made from various materials too, ...
6
votes
2answers
360 views

Nit picky personal accounting question: What is the right way to record borrowing from yourself?

I keep a spreadsheet with my personal financial statements (balance sheet, income statement, cash flow) that generally follows the corporate approach. I omit considerations of depreciation, etc. There'...
4
votes
1answer
88 views

Should you work out the yield on property or shares against the purchase price, or the current market price?

In What is a good rental yield?, there's some discussion about whether you should calculate yield by dividing the original purchase price, or the current market price. Which is the correct definition,...
3
votes
1answer
188 views

Calculate hourly wage from annual salary offer?

I recently took a new job and accepted the pay at an annual rate. When I got my first pay check I saw that I was being paid hourly. The problem is that if you multiply my hourly wage by 40 * 52 or use ...
2
votes
1answer
887 views

Asset Sale: Net proceeds to cash AND capital gains?

This is very simple but I'm having trouble figuring out how to account for the sale of an asset, in double-entry bookkeeping, in a way that shows the net proceeds going to cash AND recorded as a ...
2
votes
0answers
185 views

How to divide up utilities amongst tenants? [duplicate]

Let's say I have two tenants who share my apartment with me. It is agreed that utilities shall be divided equally amongst us. However, one tenant has, as part of his lease, a stipulation that all ...
2
votes
1answer
718 views

What are the tax implications for doing accounting on the cash vs the accrual method?

What are the tax implications in the U.S. for doing ones accounting on the cash method versus the accrual method? As I understand it the main difference is in the timing (i.e. which period) of ...